Rising living costs, high inflation and insurance premiums, and an uptick in unemployment are stretching household finances of millions of Americans. While many are trapped in credit card debt cycles and unending mortgage payments, others are still finding it difficult to manage their spending habits.

At a time when finances are squeezed amid relatively meagre wage growth,New York Times bestselling author David Bachbelieves that you only need to start investing $27.40 a day in your early 20s to become a multi-millionaire by the age of 60.

In an interview with renowned author Mel Robbins, Bach said that $27.40 a day is $10,000 a year. If you started investing $27.40 a day in a low-cost index fund like the Vanguard Total Stock Market ETF (VTI) in your early 20s, assuming an average 10% annual return, you'd have accumulated over $4.4 million at age 60 after compounding for 40 years.

Bach loves the power strategy of compounding interest, which Albert Einstein had described as the '8th wonder of the world.' He believes that no matter how much money you can save, be it $27 or $1 per day, you must tap into the power of compounding interest as early as possible.

Bach's philosophy of starting small aligns with the strategies of many investors and entrepreneurs.

For instance, Shark Tank's Kevin O'Leary, who is a proponent of Bitcoin and is currently overseeing the construction of massive AI data centers, had said years ago that saving small sums andinvesting consistently is central to his idea of building wealth.

'The truth is, there is a lot of crap you don't need,' he had told CNBC. 'What I've learned to do, and what has really helped me in maintaining growth in my own personal investing is, anytime I pick up something I'm going to buy, I say to myself, 'Do I really need this? Because if I don't buy it, the money is going to be invested and make money every year for me while I'm sleeping.'

Regardless of how much you earn, O'Leary urged people to take 10% of every paycheck every two weeks and invest it. 'People say, 'I can't afford that! I can barely afford my rent!' But it's not true, you buy crap you don't need every day,' he said.

In all, O'Leary does not buy 'crap' but the 'good stuff' he needs, and the remaining funds are invested; a strategy he said works all the time. He had also opined earlier on a YouTube video of a man declaring he avoids buying overpriced Starbucks drinks but makes coffee at home for just $0.20 a cup.

'I love this guy. This is exactly what I'm talking about. He's very, very conscious of not wasting a single cent. Nothing wrong with that. That's very smart. Coffee is a big money waste,' O'Leary had said of the main.

Source: International Business Times UK